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When Good Advice is Ignored : The Role of Envy and Stubbornness

Author

Listed:
  • Ronayne, David

    (Economics Dept.and Nuffield College, University of Oxford,)

  • Sgroi, Daniel

    (Economics Dept. and CAGE, University of Warwick and Nuffield College,)

Abstract

We present results from an experiment involving 1,500 participants on whether, when and why good advice is ignored, focusing on envy and stubbornness. Participants performance in skill-based and luck-based tasks generated a probability of winning a bonus. About a quarter ignored advice that would have increased their chance of winning. Good advice was followed less often when the adviser was relatively highly remunerated or the task was skill-based. More envious advisees took good advice more often in the skill-based task, but higher adviser remuneration significantly reduced this effect. Susceptibility to the sunk cost fallacy reduced the uptake of good advice.

Suggested Citation

  • Ronayne, David & Sgroi, Daniel, 2018. "When Good Advice is Ignored : The Role of Envy and Stubbornness," CRETA Online Discussion Paper Series 38, Centre for Research in Economic Theory and its Applications CRETA.
    • Handle: RePEc:wrk:wcreta:38
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    References listed on IDEAS

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    More about this item

    Keywords

    advice; skill ; remuneration ; envy ; sunk cost fallacy JEL classification numbers: C91 ; C99 ; D91;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C99 - Mathematical and Quantitative Methods - - Design of Experiments - - - Other
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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